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WASHINGTON — The “fiscal cliff” has focused attention on the risk of taxes rising next year. But
a stealth tax increase could force some taxpayers to pay more this year.

That’s because Congress has yet to pass legislation exempting millions of Americans from the
alternative minimum tax for 2012. The AMT, as it’s known, functions as an extra tax that limits the
value of tax breaks for some and forces them to pay more.

Without action this month from Congress, the AMT will cover 33 million taxpayers, up from just 5
million last year, the Internal Revenue Service says.

Staving off the AMT isn’t a partisan issue. But it has been delayed by congressional deadlock
and is now entangled in negotiations over the fiscal cliff, the tax increases and automatic
spending cuts due to occur Jan. 1.

If Washington doesn’t act on the AMT soon, some taxpayers will feel the pain. Even if lawmakers
return in 2013 and retroactively exempt many people from the extra tax, the IRS says it will be
delayed in processing refunds.

“The problem this creates is for those people who count on the refund in January or February as
a source of cash, maybe to pay off Christmas bills,” said David Kautter, managing director of the
Kogod Tax Center at American University. “They may not be able to get it when they are used to
getting it.”

“Those are the real victims in this,” Kautter said.

The average taxpayer subject to the AMT paid an additional $7,710 last year, the nonpartisan Tax
Policy Center says.

Congress created the AMT in 1969 as a means of ensuring that upper-income people paid a minimum
amount of tax. The law requires taxpayers to calculate tax liability twice — first under normal
rules, and second, under a system that curbs the value of tax breaks. (The AMT disallows the
deduction for state and local taxes and dependent exemptions.) If the AMT exceeds one’s tax
liability under normal rules, the taxpayer must pay the higher amount.

Families with children in high-tax states are most likely to pay the minimum tax, tax experts
say.

Most people who pay the AMT earn more than $200,000 a year, but the tax threatens to reach the
middle class because it wasn’t indexed for inflation. As a result, Congress routinely passes a “
patch” that exempts many people. The last patch expired at the end of 2011.

Without a new patch, an additional 28 million taxpayers would pay, on average, an extra $2,250
in income taxes next year, the Tax Policy Center says. The extra tax would ensnare 46 percent of
all married couples, the center says.